Morning in New York: quotations are driven by geopolitics

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Investors are closely following the escalation of protest activity in Iran and put the risks of possible intervention in the situation by the United States into quotations. At the same time, US President Donald Trump made it clear that a military invasion is unlikely, stating that he received assurances from the Islamic Republic authorities to stop killing protesters. In addition, the media reported that Trump's advisers doubt the rapid fall of the regime in Tehran and do not support the idea of using military force.

This Thursday, January 15, as usual, the weekly data on the number of applications for unemployment benefits will be published (consensus: 215 thousand, previous value: 208 thousand). These statistics will update the assessment of the labor market and employment sustainability against the backdrop of persistent macroeconomic uncertainty.

Morgan Stanley (MS), Goldman Sachs (GS), BlackRock (BLK) and JB Hunt (JBHT ) will report quarterly results today.

Futures on American stock indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming trades as neutral with moderate volatility. We focus on the S&P 500 fluctuations in the range of 6890-6960 points (from -0.5% to +0.5% to the closing level of the previous session).

- Taiwan Semiconductor Manufacturing Company (TSM) reported its fourth quarter earnings much better than expected. The company's profit grew 35% YoY, with revenue reaching NT$1.046 trillion (~$33.5 billion) against a consensus of NT$1.034 trillion. 7nm and below chips generated 77% of chip wafer sales, reflecting strong demand from AI servers. In 2026, the company expects to continue to aggressively ramp up through 2nm and advanced packaging capacity expansions. At the same time, the consumer electronics segment will remain vulnerable. Capital expenditures for the current year are planned at about $56 bln. The revenue guidance assumes its growth within 30% with steady demand from the AI sphere.

- BRC Group Holdings (RILY) stock soared 38% after posting its third-quarter 2025 financials, which are required to maintain its NASDAQ listing. The net loss reported a year earlier was replaced by a net income of $89.1 million, with revenue reaching $277.9 million with a strong contribution from the capital markets segment. An additional positive was the reduction of net debt by more than $120 million.

- Mission Produce (AVO) has agreed to acquire Calavo Growers (CVGW) for approximately $485 million. Calavo shareholders will receive $27 per share (cash portion of $14.85 and 0.9790 shares of Mission stock), representing a premium of about 26% to the 30-day volume-weighted average price. The transaction is expected to close by the end of August following regulatory and shareholder approvals.

- H.B. Fuller (FUL) reported fourth quarter revenue of $894.8 million with EPS of $1.28 with consensus of $902.5 million and $1.23 million, respectively. Shares of the company corrected down about 3% to $62.8 in the post-market.

January 14 trading on the U.S. markets for the majority of indices ended in the negative. S&P 500 decreased by 0.53%, NASDAQ 100 fell by 1.07%, Dow Jones fell by an insignificant 0.09%, and Russell 2000 added 0.7%.

Energy companies (XLE: +2.26%) and suppliers of consumer staples (XLP: +1.38%) were the leaders of growth. The technology sector (XLK: -1.22%) was the outsider. The shares of the "Magnificent Seven" were under pressure. Quotes of some of its member companies fell by more than 2%.

Retail sales for November rose by 0.6% mom, exceeding the consensus of 0.4% and offsetting the revised decline in October. The benchmark goods group indicator rose by 0.4% mom, confirming the resilience of consumer demand. The Producer Price Index (PPI) for November rose 0.2% mom in line with expectations. The core indicator remained unchanged, easing concerns about cost pressures.

Head of FRB Minneapolis Neel Kashkari said that there was no reason to cut rates in January, pointing to the stability of the economy. His colleague from Philadelphia Anna Paulson noted the restrictive nature of monetary policy and allowed the possibility of its easing later this year. FRB Atlanta Chairman Raphael Bostic emphasized the need to keep inflation in check. Board of Governors member Stephen Miran advocated a 150 bp rate cut over the course of the year.

Adding to the uncertainty was the U.S. Supreme Court's decision to again postpone a verdict on the White House's import tariff lawsuit.

- The realization of improved potash price forecasts will contribute to Nutrien's (NTR: +7.9%) higher revenue and cash flow.

- Schlumberger (SLB: +2.4%) has held talks with U.S. authorities and Chevron (CVX) to expand operations in Venezuela, where the company has oilfield service equipment located.

- Trip.com Group (TCOM: -17%) has been investigated in China for suspected abuse of market dominance.

- Bank of America (BAC: -3.7%), Wells Fargo (WFC: -4.6%), and Citigroup (C: -3.3%) reported neutral results for the quarter, falling short of investors' inflated expectations after strong prior-period reports.

This article was AI-translated and verified by a human editor